the william humphrey and abram myers years: the ftc from 1925

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THE WILLIAM HUMPHREY AND ABRAM MYERS
YEARS: THE FTC FROM 1925 TO 1929
MARC WINERMAN
WILLIAM E. KOVACIC*
The Federal Trade Commission is one of the oldest U.S. experiments with a
multi-member federal regulatory body. To formulate coherent programs and
establish a respectable institutional brand, such bodies benefit from a basic
level of consensus and internal harmony. Though uniformity of perspective
within the board is neither attainable nor healthy, a core commonality of pur-
pose and fidelity to collegiality are highly desirable. Attaining such common
cause depends heavily on the backgrounds, philosophies, and personal sensi-
bilities of the board’s members.
During President Calvin Coolidge’s second term (and first full term), the
FTC Commissioners shared neither the requisite commonality nor collegial-
ity, as William Humphrey served as a protagonist in two successive splits
among the Commissioners. The first, triggered by his arrival, was a partisan
confrontation. The Republicans had controlled the White House and Congress
since 1921, but first controlled a majority of Commission seats in June 1924
and first began to change the agency’s direction aggressively when Humphrey
arrived in February 1925. Though Humphrey was not a Presidentially desig-
nated Chairman (he arrived a quarter century before the President could desig-
nate the Chairman1), he was a boisterous man and a clamorous public official.
He dominated the agency for a time by the force of his personality, and he
continues to dominate discussions about FTC history between his arrival in
*Marc Winerman is an attorney in the Office of International Affairs at the FTC and for-
merly an attorney advisor to Commissioner Kovacic. Portions of Winerman’s research were un-
dertaken when he was the Victor H. Kramer Fellow at the University of Chicago Law School.
William Kovacic is a Professor at the George Washington Law School and a former FTC Chair-
man and Commissioner. The views expressed here are those of the authors alone. The authors are
grateful for comments and suggestions from Julie Carlson, Daniel Ernst, Paul Pautler, and An-
drew Winerman; for archival assistance from Tab Lewis of the National Archives and Records
Administration; and for research assistance from Christopher Callahan, Angela Diveley, Chantal
Hernandez, Christy Milliken, and Varnitha Siva.
1Reorganization Plan No. 8 of 1950, 15 Fed. Reg. 3175 (May 25, 1950).
701
77 Antitrust Law Journal No. 3 (2011). Copyright 2011 American Bar Association.
Reproduced by permission. All rights reserved. This information or any portion thereof may
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electronic database or retrieval system without the express written consent of the American
Bar Association.
702 ANTITRUST LAW JOURNAL [Vol.77
1925 and his dismissal in 1933.2 With his arrival, three Republicans appointed
by Republican Presidents confronted two Democrats appointed by a Demo-
cratic president, while the intensely partisan Humphrey confronted a similarly
partisan Democrat, Huston Thompson. The result, a deep and public divide,
figures prominently in commentary about the FTC’s formative era.
Contrary to most interpretations, though, we find that neither the partisan
divide nor Humphrey’s initial dominance lasted for long. As we explore
through narrative and case studies, the partisan rift dampened by 1927, as the
sitting Democrats’ terms expired. Although they were replaced by other Dem-
ocrats, Garland Ferguson and Edgar McCulloch, and although a Senate Dem-
ocrat essentially chose one and several Senate Democrats backed the other,
the new Democrats were far less confrontational than their predecessors. But
partisan conflict did not give way to harmony. Rather, an intra-party rift
emerged by 1927. That rift reflected some of the numerous approaches (or
alternatives) to antitrust that ran through the progressive years and into the
early New Deal, often transcending party lines. Humphrey was again a key
player, but his principal foe this time was another Coolidge-appointed Repub-
lican, Abram Myers.
Humphrey and Myers aligned against each other, usually in the lead roles,
on wide-ranging disputes. Substantively, Humphrey generally sought a rela-
tively limited government role, preferably as a facilitator for business, unless
conduct involved deception or fraud; Myers had a more activist agenda with
some roots in the New Nationalism of Theodore Roosevelt (TR) and in his
understanding of Herbert Hoover’s associationalism. Additionally, Humphrey
was a former Congressman focused on patronage and perks; Myers, a career
antitrust lawyer from the Justice Department, focused more on agency per-
formance. With one significant exception, a Humphrey-inspired antifraud ini-
tiative, Myers generally prevailed in his confrontations with Humphrey.
Indeed, he often isolated his foe, although Humphrey struck back in public
denunciations. However, Myers stayed less than three years; his hopes of re-
appointment were most likely compromised by a confrontation with a power-
ful senator and a federal judge. Humphrey’s influence would revive somewhat
after Myers left, but he would subsequently be on the defensive far more often
than he was on first arriving.3
2Franklin Roosevelt fired Humphrey without citing cause, and Humphrey sued, successfully,
for lost pay. The case established the independent commission as a foundation of the federal
regulatory state. Humphrey’s Executor v. United States, 295 U.S. 602 (1935). See also William
E. Leuchtenburg, The Case of the Contentious Commissioner, Humphrey’s Executor v. U.S., in
FREEDOM AND REFORM 276 (Harold M. Hyman & Leonard W. Levy eds., 1967) [hereinafter
Contentious Commissioner].
3See ELLIS W. HAWLEY, THE NEW DEAL AND THE PROBLEM OF MONOPOLY: A STUDY IN
ECONOMIC AMBIVALENCE (1966) [hereinafter NEW DEAL] (multiple approaches to antitrust). For
significant works that virtually ignore Myers, seeGERALD BERK, LOUIS D. BRANDEISANDTHE
2011] THE FTC FROM 1925 TO 1929 703
More broadly, as we continue our analysis of the early FTC,4 we examine
its internal dynamics, highlighting issues that divided the Commission. We
return to basic questions that bear upon the effectiveness of a young competi-
tion policy institution. How did its organization and management affect its
performance? Was its ability to succeed helped or hindered by a multi-mem-
ber structure, particularly a structure that, until 1950, included an inherently
weak Chairmanship? These are the key issues highlighted by the successive
splits discussed above. Also, was it able to develop constructive relations, or
at least avoid destructive collisions, with other public bodies? Could it de-
velop coherent policies from a mandate that amalgamated widely divergent
views of the regulatory state? How did it handle political and economic
change? Was it effective in implementing its program?
In this analysis, we challenge interpretations that dismiss the FTC of the
1920s, particularly after 1925, as too timid to mass its resources to confront
issues of economic and legal import.5 Commentators often suggest that its
program of the 1920s reflected a broader, pervasive national languor in com-
petition policy—what Richard Hofstadter termed “the era of neglect.” The
idea that the agency developed and nurtured an instinct for trivia, whether by
choice or necessity, resonates powerfully over much of its existence.6
In its litigation program, the FTC did bring fewer new cases during Coo-
lidge’s second term than it had during the previous term. This was particularly
so on the competition side. Nevertheless, we take issue with the view that the
shift in litigation activity can correctly be equated with “neglect.” As dis-
cussed below, numerous factors contributed to the decline in the number of
MAKINGOF REGULATED COMPETITION, 1900–1932 (2009);THOMAS BLAISDELL, THE FEDERAL
TRADE COMMISSION: A STUDYINTHE CONTROLOF BUSINESS 82 (1932) (placing his departure in
1927); ROBERT F. HIMMELBERG, THE ORIGINS OF THE NATIONAL RECOVERY ADMINISTRATION
64, 97 (1976) (noting Myers’s role in passing); George Cullom Davis, Jr., The Transformation of
the Federal Trade Commission, 1914–1929, 49 MISS. VALLEY HIST. REV. 437 (1962).
4See Marc Winerman & William Kovacic, Outpost Years for a Start-up Agency: The FTC
from 1921–1925, 77 ANTITRUST L.J. 145 (2010); Marc Winerman, History Through Headlines,
72 ANTITRUST L.J. 871, 874 (2005); Marc Winerman, The Origins of the Federal Trade Commis-
sion: Concentration, Cooperation, Control, and Competition, 71 ANTITRUST L.J. 1, 15–27
(2003) [hereinafter Origins]; William E. Kovacic, The Federal Trade Commission and Congres-
sional Oversight of Antitrust Enforcement, 17 TULSA L.J. 587, 600–01 (1982); William E.
Kovacic & Marc Winerman, Competition Policy and the Application of Section 5 of the FTC Act,
76 ANTITRUST L.J. 929 (2010).
5A significant exception to this general trend is Gerald Berk’s analysis. See BERK, supra note
3. Berk is highly approving of work that he attributes (at the Commissioner level) to Edward
Hurley (1915–1918), Nelson Gaskill (1920–1925), and Humphrey (1925–1933).
6RICHARD HOFSTADTER, What Happened to the Antitrust Movement?, in THE PARANOID
STYLEIN AMERICAN POLITICSAND OTHER ESSAYS107 (1965) (adding that antitrust prosecutions
throughout the decade “were almost minimal”); AMERICAN BAR ASS’N, COMMISSIONTO STUDY
THE FTC, REPORTOFTHE ABA COMMISSIONTO STUDYTHE FEDERAL TRADE COMMISSION 4, 9
(Sept. 1969) (finding substantial trivia in the FTC’s portfolio and attributing this view to past
studies as well). Cf. Kovacic, supra note 4 (critiquing ABA’s reliance on prior studies).
704 ANTITRUST LAW JOURNAL [Vol.77
new cases, including earlier defeats in court; the use of “stipulations,” settle-
ments unaccompanied by agency orders, particularly on the consumer protec-
tion side; the substitution of self-regulatory trade practice conferences for
some litigation; and efforts to reduce a backlog of cases, often years old. Fur-
ther, the FTC after Humphrey arrived did issue new challenges to some major
firms, and it did issue strong orders against some others. Its merger program
slowed at first, but it issued some new merger orders (generally over
Humphrey’s dissent), resumed new merger challenges by 1927, and, at least
by 1929, devoted substantial resources to merger reviews. It also began
widely respected hearings, and wrestled with difficult questions arising from
the growth of new industries and the spread of new technologies and modes of
business organization.
In execution, though, the FTC’s performance remained problematic. To a
large extent, the most interesting aspect of its performance in this period is the
gap between the commitments embodied in the Commission’s programs and
its ability to deliver. The agency did build on earlier cases that vindicated its
authority to challenge certain conduct under the prohibition of unfair methods
of competition (UMC) in Section 5 of the FTC Act—deception and, within
the parameters that would support a Sherman Act case, resale price mainte-
nance (RPM).7 But its ability to prosecute more venturesome actions remained
relatively weak. Some initiatives were compromised by its poor working rela-
tionship with the DOJ. Some, like its aluminum case, died at the agency level;
others, like its motion picture case, died in court. Most devastatingly, in a
1927 decision rejecting an earlier challenge to Eastman Kodak, the Supreme
Court held that the FTC could not order structural relief in a Section 5 case.8
Had the Court found otherwise, the FTC might have become the country’s
preeminent merger enforcement authority.
Such rebukes underscored the agency’s failure, when it stepped outside
lines previously drawn by courts, to establish credibility as an expert competi-
tion policy tribunal. Courts often denied in practice the deference that the FTC
Act provides in theory. In part, the agency’s litigation defeats appear due to
the hostility and, perhaps, institutional jealously of the appellate courts, which
resisted the sharing of adjudication tasks over competition law to a new (and,
to some degree, rival) administrative body. The agency could hardly draw
deference on the basis of its members’ expertise. Although some came to the
agency with impressive resumes and some stayed long enough that they might
develop antitrust expertise, only Myers was a career antitrust lawyer before he
arrived. Further, the agency did not claim a mantle of expertise by incisive
7FTC v. Winsted Hosiery Co., 258 U.S. 483 (1922) (deception); FTC v. Beech-Nut Packing
Co., 257 U.S. 441 (1922) (RPM).
8FTC v. Eastman Kodak Co., 274 U.S. 619 (1927).
2011] THE FTC FROM 1925 TO 1929 705
opinions. Rather, despite improvements from the opinions issued earlier in the
decade, it continued to explain its decisions feebly. The Commission’s weak
exposition of its reasoning gave little evidence of the expertise that was in-
tended to be a strong advantage for the new agency, and reinforced whatever
institutional bias or suspicions the courts brought to their review of FTC
decisions.
The agency’s inability to spell out convincing bases for its rulings in ad-
ministrative adjudication arguably reflected a deeper problem: its failure to
gain internal consensus on its overall mission and, perhaps, on its reasons for
individual actions. Like many young competition agencies, the FTC’s imple-
menting legislation encompassed a range of expectations, some inconsistent.9
The multi-member FTC embodied these disparate goals at the same time
(while the more hierarchically structured Justice Department tended to reflect
disparate goals over time).
These problems also arose with the agency’s trade practice conferences.
Encouraging industry self-regulation through conferences could leverage the
agency’s enforcement resources through “Group I rules,” which proscribed
conduct that also violated Section 5. Through “Group II rules” that the FTC
approved for industry even though those rules went beyond Section 5, the
Commission could sometimes accomplish beneficial results that it could not
obtain through litigation. While often successful on the consumer protection
side, though, the early conferences were far more problematic on the competi-
tion side. The agency approved many rules that, while consistent with some
views of the regulatory state then extant, were highly anticompetitive. These
problems were exacerbated by a brief experiment with a “clandestine viola-
tion” rule (backed by Myers but strongly opposed by Humphrey) intended to
enable the Commission to enforce Group II rules under Section 5. But the
most fundamental flaw in the trade practice conference procedure, as in litiga-
tion, was that the Commission rarely explained specific actions. Indeed, with-
out the routine prospect of judicial review hanging over Group II rules, the
agency may have had reduced incentives even to seek legal and economic
coherence in its policy prescriptions. The process thus proved seriously
flawed. By 1929, the program began to fracture; soon after, it would break
down.
Thus, the trade practice conference program of the late 1920s shows the
same themes as its litigation program of those years. The agency was torn by
serious divides, first inter-party then intra-party. Its experience highlights a
9See, e.g., A. Neil Campbell & J. William Rowley, The Internationalization of Unilateral
Conduct Laws—Conflict, Comity, Cooperation, and/or Convergence, 75 ANTITRUST L.J. 267,
277–81 (2008) (discussing historical context of the competition laws of the United States, the
European Union, Canada, Australia, and South Africa).
706 ANTITRUST LAW JOURNAL [Vol.77
vulnerability of multi-member bodies. Without an essential core of shared
purpose, a commitment to collegial decisionmaking, and a basic level of per-
sonal compatibility among board members, the multi-member forum serves as
a boxing ring rather than a means for constructive deliberation. Additionally,
the agency’s work during these years continues to highlight themes from ear-
lier years, as it combined an often-ambitious agenda with seriously flawed
execution.
I. THE FTC BEFORE 1925
A. ROOTS OF THE FTC ACT
Upon Humphrey’s arrival, the FTC was nearly a decade old. It was rooted
in the Progressive Era, when antitrust was a deeply contested issue—most
visibly between 1911, when the Supreme Court announced the rule of reason
in Standard Oil,10 through the 1912 election, and into the 1914 legislative
debates that produced the FTC and Clayton Acts.11 Critically, there was no
single “progressive” philosophy on antitrust, and varying views articulated
during the debates about creating an FTC would later be internalized within it.
Competing views about the FTC’s formation in 1914 cast a long shadow in
later decades. During the early New Deal, three visions about the appropriate
role for antitrust policy continued to compete in the battles over the National
Recovery Administration.12 The first was an activist approach associated with
TR’s New Nationalism. In TR’s vision, large businesses would be left intact
in exchange for tight government control, including a process by which a
government agency could pre-clear mergers and agreements.13 The second an-
ticipated less direct supervision of companies and more reliance on antitrust
enforcement, as advocated in 1912 campaign (in increasing order of aggres-
siveness) by Woodrow Wilson in his New Freedom program; by Wilson
spokesman Louis Brandeis, and by agrarians like William Jennings Bryan.14 A
10Standard Oil Co. v. United States, 221 U.S. 1 (1911).
11Act of Sept. 26, 1914, ch. 311, §5, 38 Stat. 717; Act of Oct. 15, 1914, ch. 323, 38 Stat. 730.
12See HAWLEY, NEW DEAL, supra note 3.
13Despite his reputation as trustbuster, TR had long doubted antitrust. By 1912, he criticized
dissolution suits, praised a German law that legalized and regulated cartel activity, and embraced
broad government oversight of business. See Winerman, Origins, supra note 4; Marc Winerman,
Antitrust and the Crisis of ’07, ANTITRUST SOURCE, Dec. 2008, at 1, http://www.americanbar.
org/content/dam/aba/publishing/antitrust_source/Dec08_FullSource12_22f.authcheckdam.pdf.
14Wilson advocated precise legislative standards and severe sanctions directed at offending
corporate officials. At least in 1912, he viewed the economy as dynamic and anticipated that
antitrust could restrain “giants,” so that smaller and more innovative competitors could thrive.
Until the spring of 1914, Wilson resisted giving prosecutorial powers to a trade commission.
Winerman, Origins, supra note 4, at 38–48, 52–58, 62–68; JOHN MILTON COOPER, WOODROW
WILSON: A BIOGRAPHY 176–77, 226–34 (2009). Brandeis’s more aggressive approach called for
stronger antitrust laws, but he also included an associationalist concern with trade association
2011] THE FTC FROM 1925 TO 1929 707
third approach, “associationalism,” broadly advocated collective action, in-
cluding information-sharing programs among business. Associationalism was
less prominent in the early debates than the other strands, but Brandeis incor-
porated it into his program and it gained increasing traction—sometimes but
not always through advocates who sought to reconcile it with antitrust—by
the 1920s.15 Still other visions contesting for supremacy from 1912 to 1914
(and surviving into the 1920s) resisted any new legislation. Most of those who
resisted new legislation wanted business left alone, but William Howard Taft,
the sitting Republican President in 1912, offered a variant that included strong
enforcement under the Sherman Act.16
B. THE FTC’S FIRST DECADE
The FTC opened its doors in March 1915. As we have discussed previ-
ously, with particular focus on 1921 through 1925, it pursued an ambitious
agenda during its first decade. Although the World War I mobilization (which
relied on extensive business-government collaboration through the War Indus-
tries Board) diminished antitrust enforcement for a time, the FTC moved for-
ward to apply the range of policymaking tools that Congress provided. It
relied heavily on litigation under the FTC and Clayton Acts, but also used,
together with or in lieu of litigation, public hearings, investigations, and re-
ports. It developed the non-statutory trade practice conference procedure. Un-
fortunately for the Commission, though, even when its litigation initiatives led
to administrative orders, many of those failed in court. Further, while some
defeats were likely inevitable in the face of a hostile judiciary, the agency
compounded judicial hostility with decisions lacking convincing (or any)
rationales.17
As we have also discussed before, the impact at the FTC of the Republi-
cans’ electoral victories in 1920 was slow in coming. Though the Republicans
controlled the White House and Congress, the Commission was somewhat
shielded by surviving pockets of progressivism, particularly in the Senate, and
the vagaries of Commissioner turnover. Wilson’s later appointees (the last of
activity and sought to reverse the per se prohibition on resale price maintenance of Dr. Miles
Medical Co. v. John D. Park & Sons Co., 220 U.S. 373 (1911). See Winerman, Origins, supra
note 4, at 32–38; see also MELVIN I. UROFSKY, LOUIS D. BRANDEIS: A LIFE 300–26 (2009) (Ch.
13: The Curse of Bigness). For the still more aggressive (and less nuanced) views of Bryan and
the agrarians, seeWinerman, Origins, supra note 4, at13, 43, 69–73.
15Winerman, Origins, supra note 4,at 36–37 (Brandeis); Winerman & Kovacic, supra note 4,
at 153. See generallyHIMMELBERG, supra note 3; HAWLEY, NEW DEAL, supra note 3.
16HAWLEY, NEW DEAL, supra note 3, at 27–32. As federal judge, Taft had written a leading
antitrust decision, in United States v. Addyston Pipe & Steel Co., 85 F. 271 (6th Cir. 1898), aff’d,
175 U.S. 211 (1899). As President, his Justice Department pursued far more litigation than had
TR’s. Winerman, Origins, supra note 4, at 28–30.
17Winerman & Kovacic, supra note 4.
708 ANTITRUST LAW JOURNAL [Vol.77
which, John Nugent, was appointed in 1921) were slow to leave. Three re-
mained until Humphrey arrived, although one of these, Nelson Gaskill, was a
Republican who sought a second term from Coolidge and became the swing
vote in mid-1924. In any event, with or without a majority, the remaining
Wilson-appointed Democrats, particularly Huston Thompson, could generate
substantial controversy.18
II. THE POLITICAL BACKDROP TO COOLIDGE’S SECOND TERM:
CONGRESS, COOLIDGE, AND HOOVER
The 1924 election, like that of 1912, was multi-sided. Coolidge ran against
John W. Davis, a conservative Democrat nominated at a convention fractured
over social issues, and Robert La Follette, a Republican Senator from Wiscon-
sin and the standard bearer for a new and short-lived Progressive Party. (Hus-
ton Thompson was mentioned as a possible running mate for La Follette.
Coolidge won handily.) The Republican also held the Senate; they advanced
from 53 Senate seats (of 96) to 54 in 1925 (and would retreat to 48 in 1927).
In the House, where they had won 225 of 435 seats in 1923 (75 fewer than in
1921), they advanced to 247 seats in 1925 (and would retreat to 238 in 1927).
However, these numbers tell only part of the story. The Democratic ranks
included many Southern conservatives, while the Republicans had such
progressives as Senator George W. Norris of Nebraska—who backed La Fol-
lette and was, for a time, stripped of his seniority. Coolidge, like his predeces-
sor Warren G. Harding, often encountered resistance in Congress.19
Coolidge, who had taken office when Harding died, shared his predeces-
sor’s commitment to cut taxes and shrink government. However, he was in
many ways a different person. Unlike Harding, he ran his administration with-
out the taint of scandal. On a personal level, he was at first a workaholic,
18Winerman & Kovacic, supra note 4, at 164–65 (noting, for example, Thompson’s testi-
mony, in a proceeding to impeach the Attorney General, that the DOJ was insufficiently respon-
sive to FTC referrals). Robert Himmelberg quotes a May 1925 letter (soon after Humphrey
arrived) from a staffer to his patron, a progressive Senator. According to the staffer, it was
formerly “as much as our jobs were worth to have the presumption and temerity to recommend
against dismissals before taking testimony.” Himmelberg finds the letter “very convincing,”
though open to self-serving imputations. HIMMELBERG, supra note 3, at 53 n.13.
19Party Division in the Senate, U.S. Senate, http://www.senate.gov/pagelayout/history/one_
item_and_teasers/partydiv.htm; House History, Office of the Clerk, U.S House of Representa-
tives, http://artandhistory.house.gov/house_history/index.aspx; MICHAEL E. PARRISH, ANXIOUS
DECADES: AMERICA IN PROSPERITY AND DEPRESSION, 1920–1941, at 66–70 (1992); ELLIS W.
HAWLEY, THE GREAT WAR AND THE SEARCH FOR A MODERN ORDER 64–65 (2d ed. 1992);
ROBERT SOBEL, COOLIDGE, AN AMERICAN ENIGMA 320–25, 330–34 (1998) (relations with Con-
gress); La Follette Group Favors Democrat for Vice-President, CHRISTIAN SCI. MON., July 5,
1924, at 1; Majority Senators Advance “Rebels,” N.Y. TIMES, Dec. 15, 1926, at 2; DAVID A.
HOROWITZ: BEYOND LEFT AND RIGHT: INSURGENCY AND THE ESTABLISHMENT 60 (1996). See
generally GARLAND S. TUCKER III, THE HIGH TIDE OF AMERICAN CONSERVATIVISM: DAVIS,
COOLIDGE, ANDTHE 1924 ELECTION (2010).
2011] THE FTC FROM 1925 TO 1929 709
although, according to a biographer, he was deeply changed by the death of
his teenage son during the 1924 campaign and after that became listless and
morose. On a political level, Coolidge was less open to Republican progres-
sives than Harding had been. Most significantly for the FTC, Harding had
brought into his cabinet Herbert Hoover, over substantial resistance from
party leaders. Coolidge, in contrast, deeply disliked Hoover, though he did not
force him to leave. Further, consistent with a general approach of delegating
substantial discretion to subordinates, he allowed Hoover to pursue his
interests.20
Before Hoover himself became President, he was, from 1921 to 1928, an
extraordinarily influential Secretary of Commerce. He trespassed so fre-
quently into the work of other agencies that he was sometimes called the Sec-
retary of Commerce and “undersecretary of everything else.” A self-made
man, Hoover rose from poverty to become a leading international mining en-
gineer and businessman, reported at age twenty-seven to be “the highest sala-
ried man of his years in the world.” In 1914, at age forty, he turned to public
causes. He directed a non-governmental organization that fed Belgians when
war broke out; served as Food Administrator in Woodrow Wilson’s war cabi-
net; accompanied Wilson to the post-war peace negotiations at Versailles; and
was the subject of a 1920 boomlet, backed by Brandeis and Franklin
Roosevelt (FDR), for the Democratic Presidential nomination.21
Hoover’s variant of progressivism saw the government as essentially a
facilitator for voluntary private action (although his active approach, his gov-
ernment positions, and his use of government action or funding created para-
doxes with which biographers have grappled22). His public/private approach
was reflected in his efforts on disaster relief, extending from Belgium wartime
food relief in 1914 to Mississippi Valley flood relief in 1927.23 As to govern-
ment’s relations to business, his progressivism, which in some respects paral-
leled that of Brandeis, took the form of supporting associational activities,
which sought to rationalize competition through such programs as information
20Winerman & Kovacic, supra note 4, at 159–65; SOBEL, supra note 19, at 308, 317.
21MARTIN L. FAUSOLD, THE PRESIDENCYOF HERBERT HOOVER 1–19 (1985) (noting “under-
secretary.” Id. at 15.); WILLIAM LEUCHTENBURG, HERBERT HOOVER 1–50 (2009) (quoting
description of his wealth. Id. at 15.); Winerman & Kovacic, supra note 4, at 160.
22Leuchtenburg argues that Hoover’s belief in voluntarism often ignored government backing
or other support, and thus involved an element of self delusion. LEUCHTENBURG, supra note 21,
at 31–32, 68–70. Another recent biographer finds that, “[p]hilosophically, he believed in limited
government and voluntarism, but temperamentally, he inclined toward governmental activism
and strong leadership.” KENDRICK A. CLEMENTS, THE LIFE OF HERBERT HOOVER: IMPERFECT
VISIONARY, 1918–1928, at xi (2010).
23LEUCHTENBURG, supra note 21, at 24–50, 68–70.
710 ANTITRUST LAW JOURNAL [Vol.77
exchanges, uniform cost accounting, and the creation of industry standards.24
To this end, he spearheaded efforts in the early 1920s to limit constraints on
information exchanges that the Supreme Court announced in 1921 and relaxed
in 1925.25
But Hoover did not oppose antitrust per se. During his Presidency, he
would resist substantial efforts to change the antitrust laws, although he would
support some limited, industry-specific modifications. Further, his Adminis-
tration would even challenge specific associational agreements to which the
DOJ under Coolidge had given qualified approval. His views, which may
have evolved somewhat over time, were likely misunderstood by many (in-
cluding, according to Hoover himself, by Commissioner Myers). However,
there also appears a consistency in his view that information sharing and other
associational activities could help smaller firms to compete, and thereby en-
courage what he called “American Individualism.”26
III. HUMPHREY’S ARRIVAL AND EARLY
DOMINANCE (1925–1926)
A. WILLIAM HUMPHREY
Humphrey, whose arrival at the FTC unified and galvanized the Republi-
can’s recently attained majority, had been a Congressman from Washington
State from 1903 through 1917. He returned to private practice after a failed
Senate bid, but remained active in politics. In a 1924 letter to the White
24HIMMELBERG, supra note 3, at 5–53; DEP’T OF COMMERCE, TRADE ASSOCIATION ACTIVI-
TIES, DOMESTIC COMMERCE SERIES—NO. 20 (1927) (describing range of associational activities
and including a chapter by former Commissioner Gaskill on information-sharing).
25Am. Column & Lumber Co. v. United States, 257 U.S. 377 (1921); Maple Flooring Mfrs.
Ass’n v. United States 268 U.S. 563 (1925). Justice Brandeis, an advocate for trade association
activities dissented in the former case and joined the six-Justice majority in the latter. See
Winerman, Origins, supra note 4, at 36–37.
26Winerman & Kovacic, supra note 4, at 160; HERBERT HOOVER, AMERICAN INDIVIDUALISM
(1922); HERBERT HOOVER, THE MEMOIRSOF HERBERT HOOVER, THE CABINETANDTHE PRESI-
DENCY, 1920–1933, 301–02 (1952); HIMMELBERG, supra note 3; HAWLEY, GREAT WAR, supra
note 19, at 48, 53–57, 83–89; ELLIS W. Hawley, Herbert Hoover and the Sherman Act,
1921–1933: An Early Phase of A Continuing Issue,74 IOWA L. REV. 1067 (1989) [hereinafter
Sherman Act] (noting, at 1095, that Hoover, like Brandeis, sometimes depicted cooperation as a
way to protect smaller business units, although another strain of his thought saw an alternative to
preventing the evils of monopoly in “managerialization” of big business); Ellis W. Hawley, Her-
bert Hoover, the Commerce Secretariat, and the Vision of an “Associative State,” 1921–1928,
61 J. AM. HIST. 116 (1974); Robert T. Joseph, John Lord O’Brian, Hoover’s Antitrust Chief,
Gives the FTC an Antitrust Lesson, ANTITRUST, Fall 2010, at 88; Letter from Herbert Hoover to
Abram F. Myers (May 4, 1931) (writing that their earlier discussions had involved “developing
the law of unfair practice,” not “consolidations of price-fixing”), in Herbert Hoover Papers, Pres-
idential Papers, Box 154, Herbert Hoover Library, West Branch, IA [hereinafter Hoover Papers];
infra note 135 and accompanying text.